Lockheed Martin Closes Purchase Of Comsat, Ending Its 38-year Existence
Comsat Corp.’s [CQ] 38-year existence as an independent company came to an end this month when Lockheed Martin Corp. [LMT] completed its purchase of Comsat, following final approval from the FCC.
Comsat will become part of Lockheed Martin Global Telecommunications (LMGT) and will give the consolidated operation annual revenues of $1 billion, company officials said. Services in the U.S. will be marketed as Lockheed Martin Global Telecommunications, while offshore the company will continue to operate as Comsat International.
“The strategic underpinning for the transaction is as strong today as when first proposed, and we’re anxious to move ahead and expand LMGT’s role in this dynamic marketplace,” said Vance Coffman, chairman and CEO of Lockheed Martin.
The merger may be the first of other strategic moves taken by Lockheed Martin to boost LMGT’s value. “As we’ve indicated, strategic partnerships are being considered to unlock the value of the LMGT assets,” Coffman added.
Roughly 40-50 employees from Comsat’s 2,200-person workforce will be laid off between now and the end of the year, John Sponyoe, LMGT’s CEO, said. A “significant” amount of savings will be achieved through synergies between the combined companies and from the personnel reductions, he added.
All of the existing Comsat businesses will be evaluated by LMGT to determine if the “right returns” are achieved, now that the merger has been completed, Sponyoe said.
The new LGMT includes business lines for network and satellite services, along with systems and technology. Satellite services provide satellite capacity, network management and systems engineering services that extend voice, high-speed data and multimedia networks virtually anywhere worldwide. The merger also leaves LMGT as the U.S. owner, and the largest shareholder of both the Intelsat and Inmarsat satellite systems.